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Canada's new lustre in the world

BY ADAM DAIFALLAH, THE GAZETTEJULY 28, 2011 5:33 AM

About 10 years ago, the American conservative magazine National Review ran an issue whose cover featured some Mounties with the word "WIMPS" printed across the page. The cover and the accompanying article by Jonah Goldberg, "Bomb Canada: The Case for War," was a semi-satirical attack piece, taking Canada to task for its perceived anti-Americanism and lack of contribution on the world stage.

Making fun of Canada has long been a U.S. national pastime. Recall the contest held by Michael Kinsley, then editor of the New Republic, to find the world's most boring headline. The winner? "Worthwhile Canadian Initiative." As recently as 2006, Goldberg, writing again about Canada, called us "arguably the most deluded" industrialized nation in the world" because "elite Canadians" think "being different than the U.S. and sucking up to the United Nations will buy them grace on the cheap."

Today, no one is laughing at the Great White North - especially Americans - and certainly no one would accuse the Harper government of kowtowing to the UN.

As economic confidence south of the border plunges to a 15-year low and the debt-ceiling fiasco edges toward catastrophe, many U.S. experts are praising Canada as an attractive low-tax environment and a beacon for sound fiscal policy and good governance. The opportunities before us are immense - and the last to take note, as usual, are Canadians themselves. This week, for example, Canadian business titan Peter Munk said that Canada now has the same opportunity to do with the mining sector what Britain did with the financial sector at the turn of the last century - that is, to become its global centre.

What's most surprising about all the plaudits is that much of them are coming from the heretofore most critical corners - particularly from U.S. conservatives.

Fred Barnes, editor of the Weekly Standard, recently took to the pages of the Wall Street Journal to argue that the government of Jean Chrétien set the example on how to right an economically failing ship: cut government spending and do not raise taxes. As Barnes noted, between 1995 and 1998 Canada turned a $36.6-billion deficit into a $3-billion surplus.

(The Wall Street Journal was a fitting avenue for the article; in 1995 that newspaper ran an editorial suggesting that Canada was close to bankruptcy. Many credit the attention the editorial received for jolting Chrétien and then-finance minister Paul Martin into action.)

Meanwhile, a surprising new article in Maclean's notes that Canada is emerging as the go-to destination for the world's wealthy. Tax specialists apparently now refer to Canada as the "Great White tax haven" and the "Switzerland of the North." The inflow of high-net-worth individuals to our country (last year, 12,000 people moved here under a special immigration program for the wealthy) is giving Canada a net economic boost of roughly $2-billion a year - and the trend is likely to continue.

The U.S. conservative movement is also looking to the Harper Conservatives for ideas. A consensus has emerged in the U.S. that Canada handled the 2008-2010 economic crisis better than any other western country, and conservatives there have been particularly impressed with the Harper government's campaign strategies of microtargeting defined blocs of voters to broaden its support.

At the moment, everything from our immigration laws to the GST is being praised by Americans as examples of good public policy.

A quick pat on the back is more than deserved, and we should give credit to our successive national governments for the sound economic policies that have led us to this place. But we shouldn't get caught up in self-congratulation either.

It wasn't that long ago that we were battling the brain drain (which has now effectively reversed direction) and paying $1.45 to buy a U.S. dollar.

Canada seems to perform well when the global economy doesn't. Europe and the U.S. are in the gutter, but we are holding our own. When things are going well elsewhere, Canada is perceived as an overregulator, and to a great extent that perception is true.

Canada-enviers ought to tread carefully. They should look to Canada as a model in terms of outcome, not of process. In the past we have too often drifted into over-regulation of the economy. With the continuing emergence of the dynamic and risk-prone economies of the group known as BRIC (Brazil, Russia, India, China), this is not the time to take the safe route by turning to increased red tape, particularly in the U.S.

We obviously have many challenges ahead of us, but let this international admiration remind us that things in Canada are going extremely well - though we have to work hard to hold on to our status as an enviable economy. That status is, for lack of a better term, worth something.

Adam Daifallah is a partner at Hatley Strategies, a montreal public-affairs firm,and a lecturer at McGill University's Department of North American Studies

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I am a member of the Immigration Consultant of the Canadian Regulatory Council (ICCRC) I opened my Immigration Consultancy Firm in order to provide my services to people interested in studying, working, investing and living in Canada.